Exhibit 10.19
GUARANTY
THIS GUARANTY (the "Guaranty") is made and given as of this 14th day of
July 2004, by Maverick Oil and Gas, Inc. (the "Guarantor"), in favor of Trident
Growth Fund, LP, a Delaware limited partnership ("Trident" or the
"Beneficiary"). This Guaranty is being executed in connection with the Loan
Agreement executed of approximate even date by and between Maverick Basin
Exploration LLC (the "Borrower") and Trident. All capitalized terms set forth in
this Guaranty shall have their respective meanings as set forth in the Loan
Agreement, unless otherwise defined. The provisions of the Loan Agreement are
incorporated herein by reference. In the event of any conflict between the terms
of the Loan Agreement and the terms of this Guaranty, the Loan Agreement will
govern.
WITNESSETH:
WHEREAS, the Lender has agreed to lend, as its sole discretion, a
series of loans to the Borrower in the aggregate amount of up to Two Million
Fifty Thousand Dollars ($2,050,000) (the "Loan"); and
WHEREAS, said Loan shall be evidenced by one or more 12% senior
promissory notes (the "Note") and the Loan Agreement both of approximate even
date herewith, executed and delivered by Borrower to Trident under the terms and
conditions of the Loan Documents (as such term is defined in the Loan
Agreement); and
WHEREAS, as an inducement for Lender to make the Loan to Borrower,
Lender has required that Guarantor enter into and execute this Guaranty hereby
undertaking to answer collaterally for the payment of the Borrower's debt
pursuant to the terms, duties, liabilities and obligations in this Guaranty and
the Loan Documents; and
WHEREAS, as consideration for the agreement by the Beneficiary to
extend the Loan to the Borrower, the Borrower has agreed to execute and deliver
to the Beneficiary the Note; and
NOW THEREFORE, in consideration of the foregoing premises and for other
good and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the Guarantor and the Beneficiary covenant and agree as follows:
SECTION 1. Guaranty. The Guarantor hereby guarantees repayment of
$2,050,000 to the Beneficiary (the "Guaranty Amount") of all principal, interest
and enforcement costs including reasonable attorney fees arising under the Note,
provided, however, in no event shall the Guarantor be liable to the Beneficiary
for the repayment of any consequential damages incurred by the Beneficiary in
connection with the transactions contemplated by the Loan Documents. In the
Event of a Default by the Borrower under the Loan Agreement, the Guarantor shall
be required to immediately repay the Guaranty Amount as set forth herein in
favor of the Beneficiary.
SECTION 2. Guaranty Absolute. The Guarantor hereby irrevocably
guaranties the full, prompt and unconditional payment when due, of the Guaranty
Amount set forth in Section 1 hereof, when and as the same shall become due,
whether at the stated maturity date, by acceleration or otherwise, and the full,
prompt, and unconditional repayment of all principal, interest and costs of
enforcement arising under the Note, under the Loan Agreement or the Loan
Documents. This Guaranty is a primary obligation of the Guarantor and shall be a
continuing Guaranty. In the event any of the Liabilities under the Loan
Agreement shall not be paid according to its terms, the Guarantor shall
immediately repay all obligations set forth in Section 1 hereof, this Guaranty
being a unconditional guaranty of full payment and not collectibility. This
Guaranty shall continue to be effective or be reinstated, as the case may be, if
payment of the Borrower's obligation is rescinded or must otherwise be returned
by the Beneficiary upon the insolvency, bankruptcy or reorganization of the
Borrower or otherwise, as though such payment had not been made.
SECTION 3. Representations and Warranties. For purposes of this Section
3 only, the term "Liability of the Borrower" shall include any and all
liabilities or obligations of the Borrower owed to the Beneficiary, whether
direct or indirect, absolute or contingent, joint or several, now or hereafter
existing, due or to become due, including without limitation the Liabilities
under the Loan Agreement, and all liabilities of any successor of the Borrower
owed to the Beneficiary whether direct or indirect, absolute or contingent,
joint or several, now or hereafter existing, due or to become due, to or held by
the Beneficiary, including but not limited to all liabilities of the Borrower
under the Loan Agreement, the Note and the other Loan Documents. The Guarantor
hereby represents and warrants that:
(a) the Guarantor has the requisite power and authority to
execute, deliver and perform pursuant to the provisions of this Guaranty;
(b) the execution, delivery and performance by the Guarantor
of this Guaranty does not contravene any provision of any agreement or contract
to which the Guarantor is a party;
(c) the assumption by it of the obligations hereunder will
result in material benefits to it and Borrower is a subsidiary of Gurantor; and
(d) this Guaranty constitutes the legal, valid and binding
obligation of the Guarantor enforceable against the Guarantor in accordance with
its terms, except to the extent that enforceability may be limited by applicable
bankruptcy, insolvency, reorganization, moratorium or other similar laws now or
hereafter in effect or by legal or equitable principles relating to or limiting
creditors' rights generally.
(e) The Guarantor represents and warrants that to the best of
its knowledge neither the execution and delivery of this Guaranty nor any other
document, agreement, certificate and instrument to which he is a party or by
which he is bound, nor the consummation of the transactions contemplated
hereunder or thereunder or the compliance with or performance of the terms and
conditions herein or therein will result in the creation or imposition of any
lien, charge or encumbrance of any nature whatsoever upon any of the property or
assets of the Guarantor, except as permitted in or anticipated by this Guaranty,
the Note or the Loan Agreement, or is prevented by, limited by, conflicts with
or will result in the breach or violation of or a default under the terms,
conditions or provisions of (i) any indenture, evidence of indebtedness, loan or
financing agreement, or other agreement or instrument of whatever nature to
which he is a party or by which he is bound, or (ii) any provision of any
existing law, rule, regulation, order, writ, injunction or decree of any court
or governmental authority to which such Guarantor is subject.
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(f) The Guarantor represents and warrants to the best of its
knowledge that it is not a party to any action, suit, proceeding, inquiry,
hearing or investigation pending, or to the best of its knowledge, after due
inquiry and investigation, threatened, in any court of law or in equity, or
before or by any governmental authority wherein there is a reasonable
probability that an unfavorable determination, decision, decree, ruling or
finding would (i) result in any material adverse change in the business, assets,
liabilities, financial condition, properties or operations of such Guarantor,
(ii) materially adversely affect the transactions contemplated by this Guaranty
and its ability to perform its respective obligations hereunder, or (iii)
adversely affect the validity or enforceability of this Guaranty. The Guarantor
represents and warrants that to the best of its knowledge he is not in violation
of or default with respect to any order, writ, injunction, decree or demand of
any such court or governmental authority.
(g) The Guarantor represents and warrants that to the best of
its knowledge (i) all consents, approvals, orders or authorizations of, or
registrations, declarations or filings with any governmental authority which are
required in connection with the valid execution and delivery of this Guaranty by
him and the carrying out or performance of any of the transactions required or
contemplated hereunder to be performed by him have been obtained or accomplished
and are in full force and effect, and (ii) all timely consents, approvals,
orders or authorizations of, or registrations, declarations or filings with any
governmental authority which are required in connection with the making of the
Loans to the Borrower have been obtained or accomplished and are in full force
and effect, or can be obtained by the Borrower.
(h) The Guarantor represents and warrants that to the best of
its knowledge (i) he is not in violation of or default in any material respect
with respect to any applicable laws and/or regulations which materially and
adversely affect its financial condition and property, and to the best of its
knowledge (ii) he is not in violation of or default (nor is there any waiver in
effect which, if not in effect, would result in a violation or default) in any
material and adverse respect under any indenture, evidence of indebtedness, loan
or financing agreement or other agreement or instrument of whatever nature to
which he is party or by which he is bound, a default under which might have
consequences that would materially adversely affect its respective business,
financial condition, properties or operations.
(i) The Guarantor waives notice of acceptance of this Guaranty
and notice of any Liability of the Borrower to which it may apply, and waives
notice of default, non-payment, partial payment, presentment, demand, protest,
notice of protest or dishonor and all other notices to which guarantors might
otherwise be entitled, or which might be required by law and required to be
given by the Beneficiary.
(j) The Guarantor's liability hereunder shall be in no way
affected, diminished or released by (i) any amendment, change or modification of
the provisions of any of the Note, the Loan Agreement or any other Loan Document
made to or with the Beneficiary by the Borrower, (ii) any extensions of time for
performance required thereby, (iii) the release of the Borrower from performance
or observation of any of the agreements, covenants, terms or conditions
contained in any of said instruments by the Beneficiary or by operation of law,
whether made with or without notice to such Guarantor, (iv) acceptance by the
Beneficiary of additional security or any increase, substitution or changes
therein, or (v) the release by the Beneficiary of any security or any withdrawal
thereof or decrease therein.
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(k) Without incurring responsibility to the Guarantor and
without impairing or releasing the obligations of the Guarantor hereunder, the
Beneficiary may at any time and from time to time without the consent of, or
notice to the Guarantor, upon any terms or conditions and in whole or in part:
(i) change the manner, place or terms of payment
and/or change or extend the time for payment or renew or
alter, any Liability of any of the Borrower or any security
therefor, and the guaranty herein made shall apply to any of
the Liabilities of the Borrower as so changed, extended,
renewed or altered;
(ii) sell, exchange, release, surrender, realize upon
or otherwise deal with in any manner and in any order any
property by whomsoever at any time pledged, mortgaged or in
which a security interest is given to secure, or howsoever
securing, the Liabilities of the Borrower;
(iii) exercise or refrain from exercising any rights
against the Borrower or others (including, without limitation,
the Guarantor and any other guarantors of the Loan) or against
the security, or otherwise act or refrain from acting;
(iv) settle or compromise any Liability of the
Borrower, dispose of any security therefor, with or without
consideration, or any liability incurred directly or
indirectly in respect thereof or hereof, and may subordinate
the payment of all or any part thereof to the payment of any
Liability of the Borrower (whether due or not) to creditors of
the Borrower other than the Beneficiary and the Guarantor; and
(v) apply any sums by whomsoever paid or howsoever
realized to any Liability of the Borrower.
(l) No invalidity, irregularity or unenforceability of all or
any part of any Liability of the Borrower or the impairment or loss of any
security therefor, whether caused by any actions or inactions of the
Beneficiary, or otherwise, shall affect, impair or be a defense to this
Guaranty.
(m) Upon the occurrence of an "Event of Default" as such term
is defined in the Loan Agreement, the Beneficiary shall be immediately entitled
(i) to enforce the obligation of the Guarantor hereunder, and (ii) to set-off
any money owed by the Beneficiary in any capacity to the Guarantor or any
property of the Guarantor in the possession of the Beneficiary against any of
the monetary obligations of the Guarantor to the Beneficiary under this
Guaranty, without first giving notice to the Guarantor, and the Beneficiary
shall be deemed to have exercised such right of set-off and to have made a
charge against any such money or property immediately upon the occurrence of
such Event of Default, even though the actual book entries may be made at some
time subsequent thereof.
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(n) The Guarantor hereby waives any right or claim of right to
cause a marshalling of any of the Borrower's assets or to cause the Beneficiary
to proceed against any of the security or collateral held by the Beneficiary
before proceeding against the Guarantor, and the Guarantor hereby waives any and
all legal requirement that the Beneficiary shall institute any action at law or
in equity against the Borrower, or anyone else, with respect to the Note or with
respect to any other Loan Document or with respect to any security held by the
Beneficiary, as a condition precedent to bringing any action against the
Guarantor upon this Guaranty.
(o) At all such times that Beneficiary shall own outstanding
capital stock of the Borrower, the Guarantor hereby irrevocably and
unconditionally waives and relinquishes any and all statutory, contractual,
common law, equitable or other claims and rights which the Guarantor may have
against the Borrower or any other guarantor, including, without limitation, any
claim (i) to seek reimbursement, contribution, indemnification, set-off or other
recourse from or against the Borrower in connection with any payments made by
the Guarantor under this Guaranty and (ii) to be subrogated to the Beneficiary's
rights under the Loan Documents upon such Guarantor's performance under this
Guaranty.
(p) If claim is ever made upon the Beneficiary for repayment
or recovery of any amount or amounts received by the Beneficiary in payment for,
or on account of, any Liability of the Borrower, and the Beneficiary repays all
or part of said amount by reason of (i) any judgment, decree or order of any
court or administrative body having jurisdiction over the Beneficiary or any of
its property, or (ii) any settlement or compromise of any such claim effected by
the Beneficiary with any such claimant (including the Borrower), then, and in
such event, the Guarantor agrees that any such judgment, decree, order,
settlement or compromise shall be binding upon the Guarantor, notwithstanding
the cancellation of any of the Note or any other instrument evidencing any of
the Liabilities of the Borrower, and the Guarantor shall be and remain liable to
the Beneficiary hereunder for the amount so repaid or recovered to the same
extent as if such amount had never originally been received by the Beneficiary.
Notwithstanding the foregoing, however, to the extent the Beneficiary is
required to make repayment pursuant to a judgment, decree or order in which the
Beneficiary was found liable for having committed fraud, the Guarantor shall not
be liable to the Beneficiary for the portion of such repaid amounts deemed to
have been caused by such fraud.
(q) THE GUARANTOR AND BENEFICIARY HEREBY WAIVE ANY AND ALL
RIGHTS THAT HE OR IT MAY NOW OR HEREAFTER HAVE UNDER THE LAWS OF THE UNITED
STATES OF AMERICA, ANY STATE OR TERRITORY, TO A TRIAL BY JURY OF ANY AND ALL
ISSUES ARISING EITHER DIRECTLY OR INDIRECTLY IN ANY ACTION OR PROCEEDING BETWEEN
THE GUARANTOR, THE BORROWER, THE BENEFICIARY OR THEIR SUCCESSORS AND ASSIGNS,
OUT OF OR IN ANY WAY CONNECTED WITH THIS AGREEMENT. FURTHER, THE GUARANTOR
WAIVES ANY RIGHT HE MAY HAVE TO CLAIM OR RECOVER, IN ANY SUCH SUIT, ACTION OR
PROCEEDING, ANY SPECIAL, EXEMPLARY, PUNITIVE OR CONSEQUENTIAL DAMAGES OR ANY
DAMAGES OTHER THAN, OR IN ADDITION TO, ACTUAL DAMAGES. IT IS INTENDED THAT SAID
WAIVER SHALL APPLY TO ANY AND ALL DEFENSES, RIGHTS, AND/OR COUNTERCLAIMS IN ANY
ACTION OR PROCEEDING.
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SECTION 4. Addresses for Notices. Except in cases where it is expressly
herein provided that such notice, request or demand is not effective until
received by the party to whom it is addressed, all notices, requests, demands
and other communications under this Guaranty must be in writing and will be
considered to have been duly given (i) on the date of service if served
personally on the party to whom notice is to be given; (ii) on the day of
transmission if sent via facsimile transmission to the facsimile number given
below, and telephonic confirmation is obtained promptly after completion of the
transmission; (iii) on the day after delivery to Federal Express or similar
overnight courier or the Express Mail service maintained by the U.S. Postal
Service; or (iv) on the fifth day after mailing, if mailed to the party to whom
notice is to be given, by first class mail, registered or certified, postage
prepaid and properly addressed, to the party as follows:
If to Beneficiary:
Trident Growth Fund, LP
000 Xxxxxx
Xxxxx 000
Xxxxxxx, Xxxxx 00000
Attention: Xxxxx St. Xxxxxx
Facsimile: (000) 000-0000
If to the Guarantor:
or as to each party to such other address as shall be designated by such party
in a written notice complying with the terms of this section. All such notices
and other communications shall be deemed to have been delivered when received as
evidenced by a return receipt or such other written evidence or receipt of
delivery as regularly provided by the mail, delivery or courier service
entrusted with delivery of such notice.
SECTION 5. No Waiver, Remedies. No failure or delay on the part of the
Beneficiary to exercise any right hereunder shall operate as a waiver thereof;
nor shall any single or partial exercise of any right hereunder preclude any
other or further exercise thereof or the exercise of any other right. The
remedies herein provided are cumulative and not exclusive of any other remedies
provided by law.
SECTION 6. Continuing Guaranty. This Guaranty shall: (a) remain in full
force and effect until payment in full of the Liabilities or until termination
of the Guaranty pursuant to Section 7 hereof; (b) be binding upon the Guarantor,
its successors, heirs, personal representatives and assigns; (c) be assignable
by the Beneficiary only upon the prior written consent of the Guarantor and only
to the extent permitted by law; and (d) inure to the benefit of and be
enforceable by the Beneficiary and its successors, transferees and permitted
assigns.
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SECTION 7. Surrender and Termination. This Guaranty shall terminate and
shall be of no further force or effect upon the earlier of: (a) the repayment of
the Liabilities under the Loan Agreement; or (b) the repayment by the Guarantor
pursuant to Section 1 hereof.
SECTION 8. Severability. The provisions of this Guaranty shall be
considered severable in the event that any of such provisions are held by a
court of competent jurisdiction to be invalid, void or otherwise unenforceable.
Such invalid, void or otherwise unenforceable provisions shall be automatically
replaced by other provisions which are valid and enforceable and which are as
similar as possible in term and intent to those provisions deemed to be invalid,
void or otherwise unenforceable. Notwithstanding the foregoing, the remaining
provisions hereof shall remain enforceable to the fullest extent permitted by
law.
SECTION 9. Governing Law. This Guaranty shall be governed by, and
construed in accordance with, the laws of the State of Texas without giving
effect to the principles of conflicts of laws thereof. Each of the parties
hereto irrevocably consents to the jurisdiction of the federal and state courts
located in Dallas County, the State of Texas
SECTION 10. Amendments, Etc. No amendment, modification or waiver of
any provision of this Guaranty shall be effective unless the same shall be in
writing and signed by the Beneficiary and then such amendment, modification or
waiver shall be effective only in the specific instance and for the specific
purpose for which given.
[SIGNATURE PAGE FOLLOWS]
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IN WITNESS WHEREOF, the Guarantor has executed and delivered this
Guaranty as of the date first above written.
WITNESS: THE GUARANTOR
Maverick Oil and Gas, Inc.
/s/ Xxxxxx X. Xxxxx, Pres.
By:____________________________ _______________________________
STATE OF ____________________ )
COUNTY OF ___________________ )
On this ____ day of ___________, 2004, personally appeared
before me _________________, known to me to be who acknowledged that he signed
this instrument as a free act.
________________________________
Notary Public
My commission expires:__________
